The week ahead: UK & US retail sales; Barclays, NatWest results

Read our pick of the top stories to look out for this week (15-19 February), and view our key company earnings schedule.

Michael looks back at the latest moves in global equity markets and currencies, while also looking ahead to the latest UK economic data, after the surprise Q4 expansion in UK GDP. He also previews this week’s FOMC minutes, and discusses the latest full-year numbers from Barclays and NatWest.

Tuesday: Palantir’s Q3 report was the first set of numbers following its launch on the US stock market. The company specialises in big data analytics, counting the US government as one of its biggest clients with $1.5bn worth of contracts, particularly in the areas of defence and counter terrorism through its Palantir Gotham service. 

Last year the company lost $579.6m, and hasn’t made an annual profit since it was founded in 2003. The revenue picture is equally worrying, with annual revenues last year at $740m, and operating expenses which appear high at over $500m. That doesn’t seem to matter too much to investors, who have driven the Palantir share price upwards from the $10 listing price. In Q3 the company reported a loss of $0.94c a share on revenues of $289.4m, while also predicting that full-year revenues were expected to come in at $1.07bn, a 44% increase from a year ago. In Q3 the company signed new contracts with the US army and National Institutes of Health for a combined $127m, while also renewing a $300m aerospace contract. Expectations are for a modest profit of about $0.02c a share.

EQT Q4 results

Wednesday: One of the largest natural gas producers in the US, the EQT share price has made some fairly decent gains over the last quarter, on expectations that demand will rise as the world shifts to cleaner energy sources. Natural gas demand tends to rise organically during winter months in any case, and EQT’s resources in the Appalachian basin are among the richest in the world. Demand for this cleaner fuel is unlikely to diminish, especially since the new Biden administration appears determined to crack down on dirtier fuels. 

The company recently acquired some natural gas assets from Chevron further south in Pennsylvania and West Virginia for $735m, which should add to its ability to easily meet future demand without adding to its overall production cost base too much. With natural gas prices up near two-year peaks, the outlook for EQT looks positive. The company is expected to post a loss of $0.27c a share.

FOMC minutes

Wednesday: The lead-up to the January Fed meeting was notable for some apparent policy differences on the part of several Fed officials. They included Raphael Bostic of the Atlanta Fed who suggested, in contrast to the December messaging of ‘lower for longer’, that there could be a taper of the $120bn monthly asset purchase by the second half of this year, and a rate hike before the end of 2022. While Fed chief Jay Powell, along with vice Chair Richard Clarida, clamped down on this messaging at last month’s meeting, these concerns haven’t gone away given the prospect of another large stimulus program, and a US economy that looks more resilient than some of the recent data might suggest. 

At the press conference Powell was keen to stress that the recovery was still fragile, and a little weaker than had been the case in December, nonetheless concerns about higher prices weren’t particularly elevated in the short term. His comments that the Fed was prepared to tolerate inflation above 2% for some time suggests that they might be prepared to look past any short-term pressures. This does appear to being reflected in bond yields, with the short end fairly steady, however long-term inflation expectations are rising quite sharply. As such it will be interesting to note whether the concerns articulated by some FOMC members in early January got an airing in the broader discussions around what might happen if…